Scribd
Upload
67 views1 page

A2 Millk Case Write Up

The document discusses the growth of A2 Milk Company and its A1 protein-free milk product. It emerged as a niche product catering to consumers who wanted to drink cow's milk but experienced discomfort from regular milk. While initially viewed as a marketing gimmick, growing sales proved demand existed. A2 Milk Company formed partnerships with Fonterra as it grew, though Fonterra was initially slow to realize the value of A1-free milk.

Uploaded by

Andrew Choi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
67 views1 page

A2 Millk Case Write Up

The document discusses the growth of A2 Milk Company and its A1 protein-free milk product. It emerged as a niche product catering to consumers who wanted to drink cow's milk but experienced discomfort from regular milk. While initially viewed as a marketing gimmick, growing sales proved demand existed. A2 Milk Company formed partnerships with Fonterra as it grew, though Fonterra was initially slow to realize the value of A1-free milk.

Uploaded by

Andrew Choi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

A2 Milk Company (A2MC) started as a niche product in the dairy market.

Products differentiated
into two groups, cow milk and cow milk alternatives. A2 Milk emerged into the market as a “best
of both worlds” type product. A2 milk, which was free of A1 proteins, tasted just like ordinary
A1/A2 milk but didn’t come with the discomforts that milk consumers experienced. This
product catered to the consumers who weren’t lactose intolerant but to the ones who thought
they were lactose intolerant but wanted to consume cow milk. Alternatives were nut milks and
other animal milk products, which didn’t have the same nutritional content or taste as cow milk.

The concept of A2 protein milk in its early days was viewed as a marketing gimmick and had a
lot of uncertainty on the validity of the research studies done on it. As A2 Milk grew as a
company and sales proved that there was a market demand for A1 protein-free milk, Fonterra
and A2 Milk formed a strategic partnership. Interestingly enough, Fonterra’s CEO, Theo
Spierings, described the A1-free milk as a marketing concept that was used to charge premiums
to consumers for milk that didn’t cause discomforts from regular milk. In 2018, Fonterra and A2
Milk Company formed a partnership to expand in other markets and to create co-branded
cheese and butter. Coincidentally, Fonterra reported poor financials for the first half of 2018 and
CEO, Theo Spierings, admitted that Fonterra was slow to realize the value of A2 Milk Company.
It doesn’t come as a surprise that A2MC’s marketing campaigns were well received by
consumers based on the growth of the company. Consumers were shifting from ordinary milk
to A1-free milk which was hurting branded milk and store-labelled milk. Branded milk has higher
profit margins while store-labelled milk was often priced below or at cost margin to attract
shoppers.

Fonterra was likely slow to realize the value of A1-free milk because it didn’t want to change the
way it was operating. The company had been operating the same way and didn’t want to change
its supply chain to offer A1-free milk. The process was costly for such an established company
and Fonterra refused to believe that consumer behavior would change for a milk that charged a
premium.

You might also like